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Monday, February 22, 2016

The Slow Boat from China

In mid-February, the Chinese New Year holiday results in a general factory shutdown, including most of the plastics production for the hobby game trade. This happens barely a month after the Christmas holiday shopping season ends, so what happens is that production runs at breakneck pace late in the year, but product moves through the channel whole hog, and then after a series of January restocks, a gigantic festive foot steps on the garden hose and the water trickles to a stop.

Despite the Chinese factories sporting the most impressive manufacturing and delivery logistics in all of human history, the course of product flow from a game publisher's factory order to the "flooring" of that product in a domestic warehouse does take weeks and sometimes longer.

Some of this is economics-driven. To keep costs down in our very non-lucrative industry, plastic TIE fighters with cute little movement dials are not going to be produced in the high-priority high-money factories that offer day-span turnaround production of iPhones and PlayStation 4 consoles.

Some of this is a simple matter of iteration. Once the factory is finished squirting plastic and cutting cardboard and wrapping a game product in printed packaging, that product still has to be cased, cartoned, palleted, containered, and sent aboard a gigantic boat to trawl the Pacific Ocean to the Port of Long Beach or another likely landing spot along a coast largely given over to resort hotels and surfer haunts.

There is more to the process than just that, but it should be obvious why even the resumption of production after the Chinese New Year break does not place new product immediately on store shelves for consumers. We really, really wish it did. But it doesn't.

None of this should be the customer's problem, of course. This is a demand market and whoever can supply the demand, rules the market. It is not an accident that Wizards of the Coast moved much Magic: the Gathering production to domestic printing facilities. Their fulfillment has reached a downright legendary level of dependability. Millions upon millions of packs of new cards reach storefronts nearly simultaneously, worldwide, four or five times a year, and for the past few cycles, restocks at any depth we desire have been available the Monday following the release weekend. Wizards has such market presence that it can spend what it takes to put that kind of production volume into motion on time. Hasbro has pockets deep enough to withstand bad sales of a release. That risk is diminished by printing in Texas instead of Wizards' decades-ago practice of printing with Cartamundi in Belgium.

Anybody dealing in prepainted plastic, however, is essentially dealing with China or southeast Asia, or not publishing at all. Games Workshop squirts unpainted plastic in Memphis, but based on figures related to me by an industry insider, adding the prepainted element domestically would run the cost up into the triple-to-quadruple MSRP range at a minimum versus the pricing we see now. The factories stateside just don't make that. What you therefore see from the Made In China publishing category are established entities like Fantasy Flight and WizKids having solid quantities on delivery but subject to periodic outages, while lesser plastic pushers face chronic unavailability of product. Funko, manufacturer of POP! and other licensed tchotchkes, splits production between China and Vietnam to hit its throughput requirements.

Waaaaaaay down here at the bottom of the food chain, at retail, we are often left at a loss to explain to our customers when a given product will be back in stock. Distribution sometimes solicits the reprint so that they can get orders staged up ahead of time, but mostly it's just a crapshoot. It will be back when it's back, and in this the Year of Our Lord Two Thousand Sixteen with all the knowledge of civilization on the social media cat meme generators in our pockets, we retailers need to be able to deliver a better answer than "I dunno." This, by the way, is one of those times when the Magic-dependent clubhouse stores are maybe playing in a safer pond than the diversified stores. The grindhouses lack for nothing in procuring the wares by which they pay the bills. The biggest variance they have to deal with is for singles walking in the door, and they shore up that uncertainty with margin. Outages of Standard-legal boosters? Forget about it. Go have lunch, call your distributor back, they'll be there.

Rather than knowing nothing about when a product will arrive, though, customers sometimes have vague or misleading information from the publisher and become frustrated with retailers, who do not control this process, when the product fails to materialize. I am going to use Fantasy Flight's website as an example, though they're not the only publisher that does this sort of thing.

On the boat, eh? Boats move pretty fast, so it seems like in a few days, it should be in stores, right? As it turns out, some products sit "on the boat" for months at a time. X-Wing "Wave 8" (depicted in part above) is in this predicament. In practice, what is probably happening is that this status flags up when the item is containerized and scheduled for loading at the Shenzhen dock. However, any number of things could delay it from being placed on a waterborne vessel, and any number of things could slow (or stop!) that vessel from arriving in a timely fashion in SoCal. The longshoremen's strike of early 2015 taught us that lesson with a beating. And it's not that common in this day and age, but it is in fact possible for ships to, you know, sink. Aaaaaaand sometimes your production schedule gets interrupted by Chinese New Year.

Fantasy Flight then doubles down on the frustration by flagging the status as "shipping to retailers." Most customers know by now that our typical ship is zero to two days for games, depending on the source warehouse. As soon as it flags as "shipping to retailers," I am immediately bombarded by requests from X-Wing players to be able to pick up their new ships. Often I don't even have a distribution delivery date yet. It's usually a few weeks away still. Let me tell you, of all the things I hate to say to a customer, right up there at the top of the list is "Do not spend money in my store." And yet there we are, because the publisher (FFG or otherwise) told the end customer just enough to make them think that the retailer is somehow the bottleneck in this process, and the product should be here by now.

Fortunately, the system usually works and the new products land in the hands of my players. Once that container ship docks in Long Beach, it's a short truck ride to Orange and Visalia. From there, the process is as impressive as it is efficient. The distributors don't even have to call me. I told them I'd buy the stuff months ago, back before the Cardinals had even clinched the NFC West. They already have my numbers in their system. Their computers flag the items for fulfillment, our reps bang out the sales orders, the warehouse staff plays some life-sized Tetris with some big brown trucks, and those Ghost Expansion Packs hurtle eastward on Interstate 10 at seventy miles an hour, eventually to land at 2531 South Gilbert Road, suites 106 and 107.

Communication throughout this process can be achieved with accuracy: WizKids provides exact delivery dates for its plastics, the ones that I strongly suspect are being manufactured at precisely the same Chinese factories as FFG's are. It is possible to do this and when retailers are put on notice so reliably, it forces us to up our game and build processes to floor new product properly week in and week out.

This situation is improving. More companies are implementing street dates, and since I called out Fantasy Flight above, it's only fair that I give them due credit for putting street dates into place just recently and saving retailers everywhere a weekly logistics headache. Street dates are great because until that date is reached, it doesn't matter (to the end user) what's going on with product production or transportation. It's not out yet. It will be. I'm sure it will arrive that week. Once the customer knows the street date, they don't even ask anything else. Now it becomes a matter of which publisher can provide that info soonest. More than two weeks' notice is especially preferred. Games Workshop, I'm looking at you.

Distributors are providing street dates or delivery dates more often lately and giving retailers meaningful release windows (where available) in solicitations. Each distributor has at least one thing they're doing really well in this regard. Alliance's website is the best in the hobby game trade for handling pre-orders, bar none. GTS makes triple sure you get the memo, between their website, their email solicitation, and weekly rep "deadline" emails for preorders. ACD excels at the single-product or small-line email solicitation, with great photos, solid descriptions, and key numbers right there for us to see. Even Diamond, for all we complain, is the best at having every product card in their database contain the complete delivery and street date data, EAN/ISBN and/or UPC, rating, virtually always an image of some sort, and reprint references. Distributors on the mass market side tend to offer similar levels of granular data and it's a delight to have access to such concrete information.

For any of my customers or just the general public reading this, now you know why stores never seem to know when the hottest games will be back on the shelves until the eleventh hour or later. We're doing our best, though, and you should fully expect us to make good with the info once we have it.